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Thursday, 14 June 2018

Bulls, Bears, and Coffee beans.

I have been an investor in Equities since the age of about 15, I was a much later punter than the infamous Rees-Mogg; although, like Rees-Mogg, I bought my first shares whilst still at school (any similarity ends there!).

On leaving school I worked on the London Stock Exchange as a 'Blue Button'; a sort of trainee, dogsbody, stockbroker. Share trading was an everyday part of my early working life.

Much later on, back in the early 1980's, I became interested in the London Commodity Exchanges, and joined a small Wheat/Barley trading syndicate. Eventually my interest became concentrated on the trading of Coffee futures (above is the London Metal Exchange; I couldn't find a picture of the 'soft' Exchanges).

I visited a well known Commodity brokerage; established an account, and continued with my 'theoretical trading' at home for another year or so, before making my initial trade. I studied charts, and followed prices on the very basic Ceefax TV service. I learned as much as I possibly could, being away from London.

Commodity futures trading is much like Equity trading in that prices go up as well as down; but opposed to Equity trading, one only places a 10% margin on any Commodity trade, making one's profits or losses multiplied by 10.

This type of trading is not to be recommended for people of a nervous disposition or a weak heart. It is extremely stressful, and full of serious financial pitfalls. Many a bankrupt has lost everything through his/her Commodity trading.

As it happened all went well, and as a result I instantly decided to quit whilst ahead. I walked away a happy man, and have never returned. It was simply far too risky for someone with my limited amount of available assets. My aim had been fulfilled, and that was that.

Trading both Equities and Commodities can be great fun, and occasionally profitable; but take my advice..... stick to the Equities.

36 comments:

It's like gambling; don't play the win.I like the photo of you yesterday. I hope the sun is shining there today. I wish you feel better today Cro. You are probably missing the grandchildren too.Greetings Maria xx

It's a mug's game. Luckily I had enough time to pay attention to what was happening. I very nearly sold several times before eventually deciding that enough was enough. I can tell you; it was a huge relief. I would never do it again.

Here are the current Bet-at-Home odds: Brazil 5.00, Germany 5,50, Spain 7,00, France 7,50, Argentina 10,00, Belgium 12,00, England 18,00, Portugal 25,00. If I theoretically place one pound on each bet I stand to win a maximum of 17 pounds or lose a maximum of 3 pounds. Of course I could lose the lot if an outsider wins. I don't bet in the real world. The only shares I ever had were from a bank that used to be a building society and went belly up so they were worthless. I'm happy and safe with my premium bonds etc..

For the amateur, in most arenas, never bet more than you can afford to lose. The Pro is betting other peoples money!I played Pontoon with my Grandad - with the gas pennies- and learnt that the Bank usually wins.

I used to meet people who were totally unsuited to Stock Market investing, thought that low risk meant no risk, it doesn't, and I told them so. Look at GEC, always considered one of the safest investments you could have, got into the wrong hands and down the plug hole it went. Even explaining a good, diverse portfolio of investment to spread risk, some would say at the end "does that mean we could we lose money then?"

Whilst I am not a gambler per se I am not risk averse. As long as they [the risks] are calculated and Lady Luck is awake and on board. And yes, it's always best to quit whilst you are ahead. A bit like leaving a party when it's in peak swing.

What I'd like to know is what made you get into investing at such an early age and then continue after leaving school. Was it a pragmatic move, curiosity, necessity? Pray, tell.

I hate gambling, but during our working years our employers had our pension funds in the market. Sometimes we were happy, other times scared. In 2008, we were devastated. We kept working to recover and stay safe today. We only invest in our grandchildren now.

The problem with 'financial advisors' is that every time they need a bit of cash, they advise you to switch investments, and cream off their commission. Much better to phone your broker, and do the job yourself.

Gambling with Other People’s money is not for the faint hearted, either! In the Olden Days I too traded derivatives - bonds, however. The punishment for that particular Sin was to fall into a burnt out heap in the mid-90s, with what felt like a fried adrenal gland. I discovered that even my teeth buzzed when I was stressed. It took positively years before I stopped dreaming Prices and Trades! Always find it laughable that the Amateur Investor is now encouraged to play around in these troubled waters (Black-Scholes What?); even those paid to do so can spectacularly explode. Zero sum game, people!

Luckily my London SE days were before computer trading. We worked with multiple land-line phones, a mechanical adding machine, pen, and paper. I don't think I could have coped with computerised dealing rooms. I hated my time there.

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11 months ago

Optimistic Cro!

The difference between an optimist and a pessimist, is that the optimist enjoys himself whilst waiting for the inevitable! I AM that optimist!

This is a daily, optimistic, 'photos and comments' blog. I make no judgements (only occasionally), just notes. If you wish to comment in any way at all, please feel free. Everything and everyone is very welcome.

About Me

I was born just south of London, but for the past 45 years I've lived in S W France. I am a painter by profession, and writer by desire. Lady Magnon and I live in an ancient cottage, in a tiny village, in perfectly tranquil countryside. We have a vegetable garden called 'Haddock's' (this may crop up from time to time), a Border Collie/Black Lab' cross called Bok, a cat called Freddie, plenty of fruit trees, and a view that takes the breath away. I try to treat our planet with respect, and encourage others to do likewise (without preaching).
Contentment is a glass of red, a plate of charcuterie, and a slice of good country bread. Perfect!